FRA publishes decision to amend Articles of Association of Investor Protection Fund

CAIRO – 13 April 2021:, Chairman of the Financial Regulatory Authority (FRA), issued Decision No. 32 of 2021, in the Egyptian Gazette, in its issue No. 86 of 2021, amending the articles of association of the Investor Protection Fund from Non-Commercial Risks to expand the insurance umbrella covered by the Fund to include the risks resulting from the activities of companies whose papers are registered or financial instruments in the Egyptian Stock Exchange.

The Articles of Association of the Investor Protection Fund covered by the Fund for the benefit of the shareholders of the Fund’s members from the companies for which securities or financial instruments are listed in the Egyptian Stock Exchanges are defined, as limitation to the bankruptcy of the Fund Member Company under a final ruling or the issuance of final judgments in favor of the owners of securities or financial instruments that are free to trade against the member’s management in two cases of fraud or gross negligence, and the compulsory delisting of the securities or financial instruments of the member company from the tables of the Egyptian stock exchanges, as a result of the issuance of a final decision by the stock exchange management pursuant to the rules for listing and delisting securities.

The Articles of Association also stipulated that the Investor Protection Fund from Non-Commercial Risks is obligated to compensate the shareholders of the member companies of the Fund that owns securities and free-to-trade financial instruments at a rate equivalent to the average closing price of the security or financial instrument within three months that it was traded on the security or financial instrument, provided that the compensation is the fair value determined by an independent financial advisor selected by the Authority from those registered in its records.

The Board of Directors of the Financial Supervision Authority had approved the rules and procedures for electing representatives of companies operating in the field of securities and companies for which securities or financial instruments are registered in the Egyptian stock exchanges to the membership of the Board of Directors of the Investor Protection Fund from Non-Commercial Risks, which was issued by Resolution No. (41) for the year 2021.